Midea's Operating Margin Expected to Stay Healthy Despite Slower Chinese Growth -- Market Talk

Dow Jones04-01

0319 GMT - Resilient operating margins for Midea Group are expected despite slower domestic growth, Morningstar analyst Jeff Zhang says in a note. He notes that the electrical appliance maker's annual results exceeded expectations, supported by deeper penetration in emerging markets which is driving solid overseas revenue growth. While reduced Chinese government subsidies may weigh on domestic earnings, strength in its industrial segments is expected to support 5%-7% operating profit growth through 2030. Margins are projected to rise to 10.5% by then, as AI-powered tools further boost cost efficiencies. Morningstar maintains fair value estimates for A shares at 89.00 yuan and for H shares at HK$98.90, adding that both look attractive as potential margin gains haven't been fully priced in. A shares last traded at 76.88 yuan and H shares were last at HK$83.80.(jason.chau@wsj.com)

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March 31, 2026 23:19 ET (03:19 GMT)

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